Crest Nicholson cuts earning targets again after ‘difficult’ summerThe housebuilder told shareholders that conditions in the property market had been ‘more subdued’ than expected during the summer season.Housebuilder Crest Nicholson has warned over profits and revealed jobs are at risk as it plans to close a divisional office amid a group-wide overhaul (Alamy/PA)Henry Saker-Clark2 minutes ago
Housebuilder Crest Nicholson has said its earnings are on track to slide to a surprise loss after “difficult” trading over the summer.
The Surrey-based company said it is set to deliver fewer home completions than previously expected as a result.
It told shareholders that conditions in the property market had been “more subdued” than expected during the summer season, which is typically quieter for activity.
Crest said its sales rate had slowed further over the past six weeks as “affordability constraints and competitive pricing” pressed down on demand.
The company expects to deliver between 1,350 and 1,400 home completions over the current financial year, down from previous guidance of 1,400 to 1,500.
It also said it is set for a loss in earnings before interest and tax of around £10 million, having previously guided towards a profit of between £5 million and £10 million.
It is the third time the company has reduced its earnings guidance since April.
The firm blamed lower expected completions driven by weaker demand on the open market and pricing pressure.
Building material prices remain about 3%-4% higher on average.
The business reported a pre-tax loss of £35.2 million for the six months to the end of April in its previous update.
Crest Nicholson added that it is reducing its debt levels quicker than expected, cutting its previous debt guidance by around £30 million.
Chief executive Martyn Clark said: “While the trading backdrop has remained difficult through the summer, we are making tangible progress on the actions within our control.
“Our cash optimisation programme is delivering with the expected year-end net debt position now materially better.
“Although the timing of a broader market recovery remains uncertain, the group is taking the right actions to protect liquidity and improve operational execution, while positioning the business for recovery when market conditions normalise.”
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