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2026 has been a nasty yr for FTSE 100 and FTSE 250 housebuilding shares. However Vistry Group’s (LSE:VTY) share value efficiency has been nothing wanting catastrophic. Right this moment, it trades at 236.8p per share, down 63% since 1 January.
The inexpensive housing specialist simply can’t catch a break, the truth is. It’s slumped one other 7% as we speak (Wednesday, 8 July) after one other surprising buying and selling replace.
I don’t personal Vistry shares. However I do love shopping for high quality shares then they droop in value and commerce on rock-bottom valuations. So I’m asking: is now the time to purchase this beaten-up FTSE 250 inventory for my portfolio?
Revenue warning
The housing market’s fragile restoration on the finish of 2025 and begin of 2026 has been actually demolished. Residence gross sales have weakened sharply, reflecting the unfavourable influence of the Iran warfare on mortgage lending charges.
But, Vistry has carried out particularly badly, and as we speak shocked the market with a revenue warning. It’s now tipping an adjusted pre-tax lack of £30m for the six months to June. It had the market’s card marked in Might when it predicted “considerably decrease” earnings from the £80.6m revenue in the identical 2025 interval. However as we speak’s outcome was a lot worse than feared.
For the total yr, pre-tax earnings at the moment are tipped at £200m, down from Might’s forecast of £223m.
So what’s gone unsuitable? On the constructive aspect, common weekly gross sales charges are up, growing 2% over the primary half. The issue is Vistry’s having to slice costs to dump its properties. Reductions on personal gross sales leapt to 7.1% from 1.4% final yr.
Completions fell 12% to roughly 6,100 properties. In the meantime, the order e book slumped 9% to £3.9bn. And worryingly, Vistry warned that
We’re not anticipating a big change in open market circumstances in [the second half], or in early 2027.
Vistry: low-cost as chips
Like many buyers, I purchase shares with a long-term view in thoughts. So if Vistry shares look good over an prolonged horizon (like 5 years), I’d be tempted to purchase. And particularly given how low-cost they presently are.
Following as we speak’s droop, the FTSE 250 share trades on a ahead price-to-earnings (P/E) ratio of simply 7 occasions. That’s lower than half the 10-year common of round 15. In the meantime, its price-to-book (P/B) ratio has toppled to 0.2, under historic ranges of 1.
However right here’s the factor. I feel earnings for all housebuilders may rise strongly because the UK’s inhabitants grows, driving demand for brand new properties. But, I’m additionally anxious that Vistry’s deal with inexpensive housing — historically a extra steady a part of the market — isn’t protecting earnings afloat. It suggests there could possibly be deep-seated issues that new chief government Adam Daniels could wrestle to repair.
I’m additionally discouraged by ongoing boardroom turmoil on the firm. Right this moment it was introduced chief monetary officer Tim Lawlor will likely be following outdated CEO Greg Fitzgerald out the door in October. It provides additional uncertainty going forwards, to not point out the sense that each one’s not effectively.
Is that this FTSE 250 share a purchase?
For extra risk-tolerant buyers, shopping for this beaten-down FTSE 250 share may show a masterstroke over time. However for me, it provides an excessive amount of danger. I’d relatively discover different low-cost shares to purchase for my ISA or SIPP.
Do you have to make investments £5,000 in Vistry Group Plc proper now?
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And proper now, Mark thinks there are 6 standout shares that buyers ought to contemplate shopping for. Need to see if Vistry Group Plc made the checklist?
Royston Wild doesn’t maintain any positions within the firms talked about.
