Crest Nicholson cuts full-year profit outlook

Crest Nicholson cut its full-year profit outlook again on Thursday as it highlighted a "challenging" backdrop.

In an update on trading for the year to the end of October, the housebuilder said it now expects adjusted pre-tax profit of between £45m and £50m, having already cut its expectations in August to around £50m.

Crest Nicholson had already announced in August that it would be reducing overheads for FY24 due to a deterioration in trading conditions in the second half. It said on Thursday that these changes will reduce annualised administrative expenses by around £3m in FY24.

They will also moderate the pace of growth in Yorkshire, where it now expects 300-350 units in 2026.

In addition, the changes will incorporate the newly-created East Anglia division into the existing Eastern division with revised boundaries, and align headcount and resources in existing divisions to the expected level of output in FY24.

Chief executive Peter Truscott said: "Given the challenging trading backdrop we have experienced this year, the group has acted decisively in streamlining its operations to align our cost base with the operating environment.

"These are difficult decisions to take but will ensure the group is well positioned to recover strongly as more supportive market conditions return."

Looking ahead, he said the housing market is expected to remain challenging into 2024, with high interest rates in place until inflation comes back down to its target level.

"However, there are reasons to be optimistic with year-on-year inflation now halved and real wage growth starting to be felt in households across the UK," he said. "We have acquired some excellent sites that are at advanced stages in the planning process, leaving us well positioned to trade in whatever market conditions emerge."