Crest Nicholson shares sink as cuts guidance amid 'marked' softening

Shares in Crest Nicholson Holdings PLC plunged on Tuesday after it lowered sales and profit expectations for the current financial year and warned of higher debt than forecast.

Shares in the Surrey, England-based housebuilder slumped 38% to 67.03 pence each in London on Tuesday morning.

Crest Nicholson said it is acting ‘quickly and decisively’ to prioritise cash and balance sheet strength whilst the uncertainty caused by the Middle East crisis persists.

In a trading update, the firm said there has been a reduction in new enquiries and visitor levels since its last update in March, a ‘marked’ softening in sentiment among prospective land purchasers and that buyers have become more cautious.

As a result, Crest Nicholson said it reducing its volume expectations for the financial year to 1,400 to 1,500 units from 1,550 to 1,700 units before, and now anticipates reduced land sales of £40 million, down from £75 million to £100 million previously.

Given higher energy costs, Crest Nicholson has also built in an expectation of higher build costs in the balance of the financial year.

This means the firm now expects to achieve earnings before interest and tax for the financial year of around £5 million to £15 million, with interest costs of around £15 million, and a revised year end net debt position of £100 million to £120 million.

JPMorgan said this implies a full-year pretax range between breakeven and a loss of £10 million which compares to previous guidance of £32 million and £40 million. In the financial year ending October 2025, Crest reported a pretax profit of £2.9 million.

In January, the firm forecast interest costs of £10 million to £12 million and year-end net debt of £15 million to £65 million.

As a consequence of lower expected profitability, Crest Nicholson said it is in the early stages of seeking temporary banking covenant relaxation.

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