Stock market investors hope for Santa rally; Vistry shares plunge after latest profit warning – business live | Business

Housebuilder Vistry is firmly on the City’s naughty list, after reporting its third profit warning of the year (see earlier post).

Shares in Vistry have plunged by almost 20% at the start of trading, making it the worst performer on the FTSE 250 index of medium-sized companies.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, says:

Vistry’s festive season is anything but merry, with profit guidance sliding down the chimney once again, this time from £300m to c.£250m, as delays to year-end transactions failed to make it onto the nice list.

This marks the group’s third profit downgrade of the year, a troubling trend driven by a string of poor management decisions and forecasting missteps that have left investors feeling far from jolly. Even a late cash influx in December couldn’t light up the season, with net debt now expected to close the year at around £200m – a far cry from the neutral footing investors had hoped for.

As the year ends on a sour note, Vistry faces a long winter of rebuilding trust, leaving investors with little choice but to mull over their options.

Another profit warning at Vistry

Kalyeena Makortoff

British housebuilder Vistry has issued its third profit warning in three months, resulting in a year-end blow to the construction company.

The business, which was relegated from the FTSE 100 share index on Monday, now expects annual adjusted pre-tax profit of just £250m, down from previous guidance of around £300m.

The group – once known as Bovis Homes – said this is partly due to delays, with a number of developments having not yet been completed, and transactions with partners having been kicked down the road to 2025.

Vistry also said that it had also ditched a number of proposed deals “where the commercial terms on offer were not sufficiently attractive.” It is expecting that better terms and options will open up next year.

But this is the third profit warning from Vistry in as many months.

In October, Vistry launched an independent review of operations in its south division after revealing it had “understated” total build costs by about 10%. It estimated at the time that this would knock profits by £115m over the next two years, and ultimately cut annual profit for 2024 to £350m, well below the £419m last year. The news sent its shares plummeting, wiping £1bn off the company’s value.

A month later, in November, Vestry said it expected a bigger hit to profit of around £165m, and downgraded its 2024 profit expectations to £300m.

Commenting on the third profit warning on Tuesday, chairman and chief executive Greg Fitzgerald said it had been a “challenging past few months”:

“Today’s announcement and the financial outcome for FY24 is disappointing. Our top priority for 2025 is to continue building and delivering high quality mixed tenure new homes for our partners and private customers, and to do our part in addressing the country’s acute housing shortage.

We remain committed to our partnership housing strategy and are firmly focused on positioning the business to move forwards and rebuild profitability.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

It’s the final trading day in global stock markets before Christmas, and traders will be hoping for a visit from Santa.

The Santa Rally is a stock market phenomenon where shares on developed markets tend to rise around the Christmas period. And there are signs today that it’s arrived – late.

Stocks are rallying across the Asia-Pacific region, where China’s CSI 300 index has gained 1.27% today, and Hong Kong’s Hang Seng is up 1%. Australia’s S&P/ASX 200 has nudged up by 0.25% and South Korea’s KOSPI index has risen by a more modest 0.13%

That follows gains on Wall Street last night, where the S&P 500 rose by 0.7%.

This sets the UK market up for gains in a shortened Christmas Eve session today; FTSE futures are up 0.6%, which would lift the London market away from last week’s one-month low.

Market sentiment has been rattled in recent weeks by concerns that central banks may not lower interest rates as swiftly as expected in 2025. Investors now expect just two US interest rate cuts next year, and two in the UK as well.

Global growth is also expected to slow next year, while the return of Donald Trump to the White House raises the risk of fresh tariffs on global trade. Trump’s election win sparked a rally in November, so perhaps Santa just came early this year.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, sets the scene:

It’s never too late to believe in Santa.

Investors on Monday were shrugging off the bad news of past week – especially the one that suggested that the Federal Reserve (Fed) would cut its rates only two times in 2025 due to a too resilient US economy. Yesterday’s data that showed that the US durable goods orders fell more than expected in November, the new home sales rebounded slightly less than expected and the consumer confidence unexpectedly dropped in December.

This bag of bad news helped tempering the latest hawkish shift in Fed expectations. As such, the buyers are out and buying. The S&P500 rebounded 0.73%, Nasdaq 100 rallied more than 1% and even the European Stoxx 600 eked out a small gain, as Novo Nordisk in Denmark jumped more than 5.5% as investors rushed in to buy a dip on bet that the weight loss drugs are here to stay.

The agenda

• 12.30pm GMT: UK stock market to close early for Christmas

• 1.55pm GMT: US Redbook index of US retail sales

• 3pm GMT: Richmond Federal Reserve