Crest Nicholson sees low-end profit amid subdued housing market
Crest Nicholson Holdings PLC on Tuesday warned pretax profit will be at the bottom end of market expectations amid challenging trading ahead of the budget.
Shares in the Surrey, England-based housebuilder fell 8.8% to 149.10 pence each in London on Tuesday, after earlier trading as low as 142.20p.
Crest Nicholson said the housing market has remained subdued through the summer amid continued uncertainty surrounding government tax policy ahead of the forthcoming budget.
As a result, the firm expects adjusted pretax profit in the financial year ending October to be at the low end of, or marginally below, the guidance range of £28 million to £38 million, and compared to £22.4 million in the year prior.
Volumes of 1,691 units for the financial year were below the guidance range of 1,700 to 1,900 units.
The firm reported an open market sales rate of 0.51 in the financial year, compared to 0.48 last year with the sales rate rate for the last 13 weeks of the financial year at 0.45.
More positively, Crest Nicholson said ‘positive progress’ on land sales on ‘good economic terms’ combined with ‘our cash focus’, has seen net debt at the better end of the £40 million to £90 million guidance range.
Chief Executive Martyn Clark said while near-term market conditions are expected to remain challenging, ‘operating discipline, improved balance sheet and clear strategic direction provide a robust platform to navigate the current environment and deliver long-term, sustainable growth.’
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