Housebuilder announces series of cost-cutting measures
Crest Nicholson has lowered its annual profit forecast for the second time in the space of a few months and said it was looking at making job losses to cut overheads.
In a trading update this morning, the 拢780m-turnover housebuilder said it now expects its adjusted pre-tax profit for the year to 31 October to be 鈥渋n the range of 拢45m to 拢50m鈥� because of the 鈥渃ontinued weakness鈥� in the housing market. This follows a previously lowering of its forecast in August from 拢73.7m to 拢50m.
The housebuilder said the profit figures were affected by an extra 拢11m of build costs on its 239-home, 拢115m Brightwells Yard regeneration in Farnham, Surrey.
Crest Nicholson also announced some details of its plan for cutting costs following a review of its cash commitments outlined earlier this year.
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It said it would reduce administrative expenses by 拢3m, slow the pace of growth in its Yorkshire division to around 300-350 units by 2026 and merge its new East Anglia arm n into its Eastern division.
Crest said it would 鈥渁lign鈥� its 鈥渉eadcount and resources in existing divisions to the expected level of output鈥� but did not specify a figure for job losses in the update.
The firm also revealed the extent of its deteriorating cash position with its year-end net cash standing at 拢64.9m. It had net cash would fall to below 拢100m, down from 拢277m the previous year.
In a brokers note, Investec said: 鈥淥verall, the update is disappointing in terms of the extra costs being flagged again and consensus PBT and net cash likely moving lower. Costs are being addressed but FY24 looks like another difficult year.鈥�
And Peel Hunt added: 鈥淭he weaker PBT as not a complete surprise, given the challenges at Farnham, but the lower cash position is.鈥�
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