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

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.
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 because he has a propensity to be positive about absolutely everything.”
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.
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 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 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.
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.