Member Info for PaulCy

One tweet by one bloke. No sources. No back up. And absolutely nothing since. So not taking it at all seriously. Though I would dearly love to be proved wrong

The "media speculation" for now amounts to no more than a tweet from one individual which has been picked up and commented on by others. If a listed compnay issued an RNS every time there was a comment on Xitter, they would be doing nothing else.

Morning

As someone who is now involuntarily very long in this stock, with an average north of 900p, I am very invested in seeing it rise again. But I am acutely aware that I am flying blind - I have absolutely no idea what is coming down the line, what is going on in the Vistry Boardroom, what chat there is over the Fitzgerald dinner table, whether WW3 will start before Xmas.. We as investors are simply looking for straws in the wind to give us hope, director buys, shorts closing, tiny turns north in the SP. But they are nothing more than that until Vistry deliver results and provide categoric assurance that 1) the accounting errors are totally contained 2) that Corporate Governance matters and that the company has hired competent management and put in place robust financial controls and 3) the partnership model works and can deliver shareholder value. Anything short of that and this SP is going nowhere for a long time. In the meantime, please please spare us the pulling of random numbers out of thin air based on nothing more than wishful thinking - whether it is the "this will be 900 by Xmas" thing - or the the "heading for 500" - none of that is based on anything more than wishful thinking. Of course if there is any evidence behind such predictions, I will be all ears. Rant over

When Rachel Reeves sat down at 2pm on Budget Day this was at 1010p (It rose by about £1 during the actual speech!) Just 3 short weeks ago! Since then it has issued a 2nd profit warning amounting to £50m and lost around £2bn in market cap. The market is vicious when it smells weakness. (And just think how much a distant memory 919p feels!)

What an utter waste of oxygen you are!

Looks like Bearded Dragon was right - every time they issue an RNS these days, it takes another chunk of the SP off! Not helped by inflation numbers this morning - looks like most housebuilders getting a hammering! Admire the optimism of some on here, bt I fear it is going to be a very long road back from here!

Removal of COO role to allow Fitzgerald even more operational oversight looks like the very opposite of what is needed here? Thoughts?

I meant Mealy Mouthed - angry fingers going too quickly!!

What an utterly pathetic effort from Vistry this morning - that RNS tell us nothing. What is needed here is action, not kind words. Get the CFO gone immediately - he does not get to pass "Go", does not get to pick up his LTIPs on the way out the door. Same for the Non-exec Chair of the Audit Committee. Serious questions also for internal and external auditors - what the hell have they been doing? Is it the usual "risk-based approach" which avoids having to actually do any investigative work?

And finally the CEO/Chair roles split and no more of this insider trading nonsense with Baker Estates!

Would have seen Fitzgerald trouser a £60 million bonus if Vistry’s shares hit £18 within three years. One source said Fitzgerald welcomed the US shareholders “with open arms”.

“They were telling Greg he was the best CEO they had ever seen and he should be paid three times as much as he was. And he believed them,” the insider said. “I mean, where do you stop? How much money does one man need?” Fitzgerald eventually turned down the huge pay deal, but not before three board directors had resigned over the issue.

Now, Vistry is suffering serious indigestion from its deal binge. Last month, it revealed it had understated the build costs of nine developments in the south of England by about 10 per cent. Initially, Vistry estimated the issue would reduce its pre-tax profits by £115 million over the next three years. The profit hit was this month revised upwards to £165 million. The company’s shares have fallen by 45 per cent from £12.73 to 695p since it revealed the problem.

An independent review highlighted that “pressure being felt from organisational change” was a key driver of the issues in Vistry’s south division. The Times reported this month that Fitzgerald offered to resign over the misstep. The board rejected Fitzgerald’s proposal.

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With City analysts fearful that cost inflation could force Vistry into a third profit warning in the coming months, the pain may not be over.

Many investors tend to turn a blind eye to weak corporate governance when the going is good. But with Vistry’s breakneck growth now under threat, there will be greater onus on Fitzgerald to justify his many money-making endeavours.

Clarity on whether decisions are driven by strategy or self-interest.” Fitzgerald and Vistry declined to comment.

Fitzgerald, who lives in Devon, knows the property market in the South West as well as anybody. He owns a 40 per cent stake in Baker Estates, a housebuilder with £61 million in annual sales and nine active developments in Devon.

Over the past three years, Fitzgerald has raked in £5.2 million from Baker Estates in dividends, fees and interest payments on loans. In 2021, Fitzgerald’s earnings from Baker Estates exceeded the £2.4 million he pocketed from his Vistry day job. Vistry disclosed Fitzgerald’s role with Baker Estates when he joined.

Both firms work with housing providers, such as Sovereign Network Group, and operate across the same region of the country, giving rise to concerns they will compete for the same plots of land. A source close to Vistry said the two firms do not compete with one another and that Baker Estates was a smaller, more bespoke, higher-end housebuilder.

The intrigue doesn’t end there. In a highly unorthodox move, Baker Estates began building a stake in Vistry’s shares in October 2022, forcing Vistry to disclose that Fitzgerald was also a shareholder in Baker Estates. It sold its entire holding for £8.6 million in January, crystallising a stellar return of 76 per cent on its investment. Vistry’s shares have fallen by 26.2 per cent to 699p since Baker Estates sold out.

This month, after a sharp decline in Vistry’s shares, Baker Estates returned to the market, buying £2 million worth of shares. Fitzgerald obtained permission for the share trading from Vistry’s former chairman, Ralph Findlay.

Since joining Bovis, for what was meant to be a short and sharp turnaround, Fitzgerald has transformed the company. In 2020, he bought Galliford’s housing business, Linden Homes, in a £1.1 billion deal and renamed the combined group Vistry. He followed that up with a £1.3 billion takeover of Countryside, a housebuilder that partners with housing associations and local authorities. Last year, Vistry’s sales jumped by 29.8 per cent to £4 billion. The housebuilder made a pre-tax profit of £419.1 million.

Controversially, Fitzgerald turned to old colleague Ian Baker to conduct site assessments on both of Vistry’s landmark takeovers. Baker’s consultancy work for Vistry — for which he was paid a total of £76,000 over two years, according to Vistry’s annual reports —caused some disquiet in the boardroom, albeit the sums were small in the context of the overall advisory fees it paid out on the deals. Sources said a debate over whether Vistry should have sought advice from an independent consultant instead was shut down by Findlay, the former chair.

That was not the only disagreement in Vistry’s boardroom of late. Last year, a group of aggressive US shareholders pushed Vistry to implement a new pay scheme that would have seen Fitzgerald trouser a £60 million if Vist

Now cracks are appearing in Vistry’s foundations, with a brace of major profit warnings caused by underestimating its build costs. Will the man with the biggest job in housebuilding be forced to change his ways?

Fitzgerald is a self-made man. He left school in Torquay with three O-levels and took a job washing dishes at the Dart Marina hotel in Dartmouth. After joining Midas Construction, the founder backed Fitzgerald to set up a housebuilding division when he was still in his twenties. Five years later, in 1997, he sold it to Galliford Try for £5 million.

He went on to lead Galliford’s housebuilding division and was promoted to chief executive in 2005. Fitzgerald’s tenure-defining bet came in 2009 with a gutsy £244 million takeover of rival Linden Homes when the housing market was on its knees. Fitzgerald may not be an especially modern chief executive — he claimed he sent his first email only in 2012 — but few could argue with the results. By the time he left Galliford, in 2015, shareholders were sitting on a fivefold return.

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Fitzgerald became embroiled in his first boardroom rumpus towards the end of his time at Galliford. He resigned as chief executive in 2014 amid a fallout with the board. Then, only a month later, Fitzgerald pulled off a stunning counter coup. With the backing of shareholders, he was reinstated in the all-powerful executive chairman role.

After Fitzgerald finally left Galliford for good, in 2016, he began setting himself up for retirement. He was appointed chairman of Ardent Hire Solutions, backed by private equity firm Duke Street Capital, and also of Baker Estates, run by veteran housebuilder Ian Baker, 54, with whom he had worked at Midas and Galliford. Then, Fitzgerald made an unexpected return to executive life when he was appointed to turn around Bovis Homes, which would later become Vistry. He took the job without relinquishing his other roles.

Since Fitzgerald’s appointment, in 2017, Vistry’s annual spending with Ardent has increased more than fivefold to £7.9 millionlast year. That equates to about 11 per cent of Ardent’s total sales. The increase, a source close to the company said, is explained by the growth in Vistry’s overall business and its acquisitions of other companies that were customers of Ardent.

Fitzgerald pockets fees of £130,000 a year for his role at Ardent. However, Vistry has not disclosed that he holds both ordinary and preference shares in the company, as documented in Ardent’s own filings at Companies House. A source close to the company said Vistry is not required to do so.

“Greg Fitzgerald’s multiple roles and significant stakes in related companies raise serious corporate governance concerns,” said Sarah Wilson, boss of advisory firm Minerva Analytics. “The potential conflicts of interest and inadequate disclosures by Vistry undermine shareholder trust and call for immediate scrutiny and transparency. Investors deserve

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Vistry’s Greg Fitzgerald faces questions over ‘conflict of interest’

Monopoly is a high-risk game. The housebuilder’s executive chairman has raked in millions from related companies, raising concerns about corporate governance

ILLUSTRATION BY PETE BAKER

Sam Chambers, Chief Business Correspondent

Saturday November 16 2024, 6.00pm, The Sunday Times

For a man who once dismissed housebuilding as a job “for pansies” Greg Fitzgerald has ended up doing an awful lot of it. The wheeler-dealer’s 40-year journey from tea boy at Exeter-based minnow Midas Construction to hard-charging boss of the housebuilder Vistry — formerly Bovis Homes — has been characterised by bold deals that have paid off handsomely.

That enviable track record has afforded Fitzgerald, 60, latitude that other housebuilding bosses can only dream of. But now, with Vistry suddenly on the back foot after two big profit warnings in quick succession, scrutiny of Fitzgerald’s unusual and lucrative business dealings — and apparent disregard for good corporate governance — is intensifying.

Vistry is on course to become the country’s biggest housebuilder. The FTSE 100 company, which owns more than 75,000 residential plots, expects to deliver 17,500 homes this year. Its developments, which span the entire country, from Redcar in the North East down to Exter in the South West, include everything from small starter homes to six-bedroom houses.

Fitzgerald serves as Vistry’s executive chairman — an all-powerful role that makes many investors uncomfortable because it means he runs the board as well as the company. Generally, such an arrangement is frowned upon in the UK, although it is more common in the US. Combining the roles of chief executive and chairman, Fitzgerald has a big job on his hands. But that doesn’t stop the straight-talking property tycoon fulfilling other roles that top up the £3.2 million pay he received from his day job last year.

In the past three years, Fitzgerald has banked £5.2 million from Baker Estates, a Devon-based developer in which he owns a 40 per cent stake. Baker Estates, where Fitzgerald is chairman, has even been making a handsome profit trading Vistry shares.

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And it doesn’t stop there. Fitzgerald also owns shares in Ardent Hire, which supplies forklift trucks to Vistry. Ardent, where Fitzgerald also chairs the board, has benefited from a fivefold increase in sales to Vistry since Fitzgerald was appointed in 2017.

Fitzgerald’s unconventional style — he freely admits he is not a “plc guy” — has made him a “Marmite character” with shareholders, according to one former colleague. “Half of them think he is fantastic, and half of them don’t trust what he says

smug ****

I applaud the optimism, and for what it is worth, I agree it looks overdone and dearly hope it comes back to previous levels. . However, on the flip side, the SP doubled in the previous 12 months based on little more than the story being sold by the management, the track record of the management and the credibility of the management. Recent events have proven that reliance on the credibility of this management was misplaced, that the story was little more than that, and that the last 12-months run up in the SP to £14+ was totally overblown. There is no more reason to justify a doubling of the share price as there is to it halving. Only when they have a credible management (ie CFO and Audit Chair publicly sacked, CEO and Chair roles split) can they be trusted to build it back up again on solid foundations - if all of the guilty parties stay in place, there is every chance it will fall over gain.

The move was confirmation that Fitzgerald was in total control of the business. Over 40-odd years in the business, he has built a reputation as a good housebuilder and earned the trust of investors.

“He’s seen as a god by some,” one former colleague explained. “He’s made a lot of people a lot of money.” Until last month, he had been doing so again at Vistry. Between April 2017, when he took over as chief executive, and September this year, Vistry shares had risen by almost 60 per cent.

Much of that came from his bold plan to sell homes predominantly to housing associations and institutional landlords such as Blackstone, the US private equity giant. He promised it would turbocharge profitability and allow him to return hundreds of millions of pounds to investors.

Fitzgerald is adamant that he can still fulfil his promise, but even his most ardent backers now accept that his vision isn’t foolproof.

With things not going as smoothly as they once were, some expect his dual role to come under the spotlight again. “The governance, which people looked through when this was all going well, will come into question now,” one senior industry executive said.

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Fitzgerald would seem to disagree. If anything, he thinks he needs more control to stop the problems in the southern division from being repeated elsewhere.

He has his work cut out to rebuild investors’ confidence. Although he oversaw Vistry’s promotion to the FTSE 100 this summer, two profit warnings in a few weeks mean relegation back to the FTSE 250 is a distinct possibility.

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The boss of Vistry, one of Britain’s largest housebuilders, offered his resignation after a costly error in its southern division which on Friday was revealed to be even worse than feared, knocking another 15 per cent off the share price.

Greg Fitzgerald is understood to have gone to his board in the wake of a surprising admission last month that site teams had underestimated how much it would cost to build out nine developments in the south of England by £115 million.

Vistry cautioned on Friday that a month-long investigation indicated that the true cost of the miscalculation is actually closer to £165 million. The error means this year will not be anywhere near as profitable as shareholders had hoped, while ambitious “medium-term” targets, which drew in many investors, have also been pushed back. The board is said to have rejected Fitzgerald’s offer, according to two people with knowledge of the matter, who asked not to be named to protect relationships. A spokesman for Vistry declined to comment.

Vistry shares fell a further 135½p, or 15.5 per cent, to a one-year low of 738p, meaning they have almost halved in value in the past five weeks.

On that last point, I listened to the call this morning and the clown of a cfo was positively salivating at the prospect of the buyback with a depressed SP - and Fitzgerald stated there was no intention to review the "return to shareholders" via buyback before May 25. I suspect he comment in the statement relates to the timetable for switching on dividends - which will probably be further away than ever now

I thought that 4 weeks ago!

On the call just now an analyst asked about plans for the buyback programme in light of current situation. CFO stated he was "happier" to be buying back shares at the current SP than at the price last week - this came across as particularly crass.