Housebuilder seeking to cut costs as it revises down its forecast for the year by 47%
Crest Nicholson has revised down its expected profit for the year by 47% as it warned that sales are 鈥減rogressively deteriorating鈥�.
In a trading update issued this morning, the housebuilder, said it is now expecting 拢50m of adjusted pre-tax profit for the year to 31 October. This is down sharply on the 拢73.7m that it had said it was expecting in its half-year report published in June.
The firm will now look to reduce its overheads and reduce its land activity. It will incorporate its new East Anglia division into its existing eastern division and revise 鈥済rowth and onboarding of resources鈥� in its Yorkshire region.
The 拢787m-turnover housebuilder said trading conditions for the housing market have worsened during the summer, 鈥渁gainst a backdrop of persistently high inflation and rising interest rates鈥�.
Crest Nicholson had previously said it was expecting sales per outlet per week of 0.50 throughout the second half of its reporting year. However this has halved in the past seven weeks, representing a 鈥減rogressively deteriorating trend鈥�.
The group is also negotiating several bulk deals with partners 鈥渢o provide support to volume delivery in future years鈥�.
It said it would publish more details of its changes to reduce overheads in a further update in November.
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Crest Nicholson said it remains committed to its dividend price per share of 17p as announced in June.
It added: 鈥淲hile pricing has remained resilient in a market with limited supply and few distressed sellers, the economic uncertainty is deterring prospective home movers.
鈥淎dditional mortgage borrowing for those looking to upgrade or for those with low levels of equity, notably first-time buyers, has become significantly more expensive with no government support (following the end of Help to Buy) now in place to cushion this impact.鈥�
Adjusted profit before tax of 拢50m for the year would be a steep drop on the 拢137.8m adjusted profit before tax recorded the previous year.
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