Crest Nicholson slashes profit forecast again as costs mount
The housebuilder said it was now predicting an adjusted pre-tax profit of £41 million for the financial year to October.
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Your support makes all the difference.Crest Nicholson has lowered its profit expectations again after warning it is facing mounting costs over a long-delayed housing project in Surrey.
The housebuilder also said it is expecting a legal bill for a fire at one of its sites in 2021.
It told investors it was now predicting an adjusted pre-tax profit of £41 million for the financial year to October.
In August, the group lowered its profit expectations to £50 million from nearly £74 million. It said it had been affected by a summer slowdown in the housing market, thanks to higher mortgage rates and fewer homes for sale.
The FTSE 250-listed firm further downgraded its profit expectations to a minimum of £45 million in November.
Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year
Crest said on Monday it was expecting to incur further costs in relation to the delayed completion of a regeneration scheme in Farnham, on top of the roughly £11 million flagged last year.
The firm won the contract for the Brightwells Yard regeneration scheme in 2003, but it was slow to get off the ground and has since seen several changes to the construction plans.
Once complete, it will include hundreds of apartments as well a shopping centre, cinema and restaurants.
Crest said it has initiated a “comprehensive review” of the costs associated with the work needed on the long-running project, as well as its other “legacy” housing sites, which will result in extra costs.
Furthermore, the company said it was expecting to take a £13 million hit over a legal claim relating to a fire which damaged one of its housing sites in 2021.
It provided a more positive outlook on sentiment in the housing market following the recent reduction in mortgage deals.
Major lenders like Barclays, HSBC UK, Halifax and Yorkshire Building Society have cut their rates this year, raising hopes activity in the property market could heat up.
“Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year,” the firm said.