For the past year, it is fair to say that partnerships housebuilder Vistry has been the toast of the housebuilding sector. While others have been reducing their output, Vistry has grown rapidly, saying in September that it had become the UK’s biggest residential developer – with its eyes on delivering 30,000 to 40,000 homes a year in the long term.

Its focus on the vital affordable housing space means that it has also made itself a key part of the government’s 1.5 million homes ambition. No surprise then that its stock market value outperformed other housebuilders this year – by an average of 43% to October – hitting over £4.5bn at peak.

But, on 8 October, events took a turn for the worse. More than £1bn was wiped off the value of the company in a single day following a profit warning related to what it initially said were £115m of “understated” cost projections on its projects. And last Friday, things got even worse, as the business revealed a further £50m profit warning and said it was reviewing growth prospects for the years ahead. The firm’s chief executive Greg Fitzgerald admitted the news was “very unfortunate [and] upsetting”, and the market seemed to agree – Vistry ended the day with shares down nearly 20%, and the company overall worth less than half what it was just two months ago.

However, the firm, which sells most of the homes it builds to housing association, local authority and build to rent clients under “partnership” deals, said on Friday that it continued to believe that the problem is largely related to just one part of the business.

It said an in-depth review of the issue, commissioned in October, had confirmed its expectation that the cost projecting issue was not systemic across the rest of the business. “Critically, we found no systemic issues outside of the South Division,” Fitzgerald said on the analyst call on Friday. “That’s the big takeaway.”

The continuing roster of major project wins announced since the initial October profit warning – such as Bromford, for 700 homes; Hinckley, Leicestershire for 475; and Solihull Council for around 200 – certainly indicates business as usual. However, the Friday update did also point to other issues which could affect future performance, such as newly rising build costs overall, the impact of Labour’s national insurance changes, escalating building safety costs, and a weaker than expected market. Certainly, the scale of the drop in the firm’s value suggests there are many who have their doubts. The profit warning seems to be a vector which has allowed questions about the business’s rapid transformation, its business model and its charismatic CEO and chair to resurface.

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