Crest Nicholson reduces profit forecast for third time

Crest Nicholson has issued another profit warning, reducing its pre-tax profit forecast once again as higher costs and a multi-million-pound charge hit.
In a trading update issued today, the housebuilder has scaled down its full-year adjusted pre-tax profit for the third time, now predicting to reach £41million after previously revising the figure to between £45million and £50million ahead of the release of its annual results on 23 January.
The housebuilder said that higher site costs had taken their toll, while a £13million charge due to a legal claim had put a significant dent in profits. The charge is in relation to an apartment scheme built by Crest which was damaged by fire two years ago.
Addressing the charge, the company said: “The group is addressing this claim diligently and efficiently and will provide further details in our preliminary results.”
The developer previously lowered its profit forecast in November to £45million to £50million after running into £11million of extra costs at its Brightwells Yard development in Surrey, and before that scaled back from an estimated pre-tax profit of £72million to £50million in August due to high inflation and rising interest rates.
Crest Nicholson’s trading statement also included some positive news despite the reduced profit forecast, with the housebuilder stating that it had seen an improvement in the market as mortgage rates begin to fall.
The statement said: “The recent reduction in mortgage rates has provided a more constructive backdrop for house buyers and the wider housing market.”
“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.”
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