UK housebuilder Vistry calls staff back to office full-time

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UK housebuilder Vistry has called staff back to the office full-time as part of efforts to get the business back on track after underestimations of building costs caused a multimillion pound overspend.

The FTSE 250 group, the UK’s largest housebuilder by number of homes, issued three profit warnings in the final quarter of last year, after discovering cost overruns in one of its regional divisions.

Executive chair and CEO Greg Fitzgerald said on a call with analysts on Wednesday that the problems had been: “A good kick up the ass, for me particularly.”

The company has already conducted an internal audit, removed several senior executives and restructured its management team in response to the problems, which contributed to a £165mn hit to profits over three years.

Fitzgerald added that in the past six weeks the company had instructed all staff to return to the office five days a week as part of its response.

Full-time return to office mandates have caused tension at other businesses: employees often prefer hybrid working, while managers think office attendance boosts performance.

Vistry previously allowed hybrid working for some staff, with one to two days a week at home depending on the job. The company also flagged “headcount reduction” during the first quarter, without disclosing the number of roles it had cut.

Vistry said: “There are real benefits to working in the office five days a week. This includes collaboration, sharing ideas, opening up communication, and developing a sense of unity. At the beginning of the year, we chose to move to this model and it’s working well.”

The group, which took over rival Countryside Partnerships in 2022, said the internal review of the cost overruns blamed factors including “insufficient management capability, non-compliant commercial forecasting processes and poor divisional culture”.

Major issues were found in the company’s south division but Vistry said it would tighten controls across the group.

Vistry reported on Wednesday that adjusted profit before tax fell 35 per cent to £263.5mn, slightly ahead of management’s reduced guidance following the profits warnings.

It has increased its building safety provision by £117mn after discovering more buildings that required work to remedy fire safety issues.

Vistry shares fell around 5 per cent on Wednesday morning. The company has been one of the UK’s most successful housebuilders, with a particular focus on building affordable housing.