Crest Nicholson slashes full-year profit guidance after tough first half

The company is now guiding to a full-year adjusted pre-tax profit of between £22m and £29m for the 12 months to 31 October, down from £41.4m last year, and earlier guidance for £45m to £50m. Meanwhile home completions are expected to fall to 1,800-1,900 units, from 2,020 the year before.

A review of completed site costs also concluded in a one-off charge of £31.4m, compared with a previous estimate of £15m, of which £25.5m is being treated as an exceptional item.

As a result, Crest Nicholson booked a loss before tax of £30.9m in the first half ended 30 April, compared with a profit of £28.4m a year earlier.

On an adjusted basis, pre-tax profit fell 88% to just £2.6m, which the company said reflected lower volume and a higher proportion of revenue from low-margin sites as it continued to reduce low-margin inventory. Results also included a one-off £5.9m charge in relation to remaining cost obligations on completed sites.

Group revenues in the first half were down 8.9% year-on-year at £257.5m which the company blamed on a "challenging trading environment". While average selling prices were stable, housing completions fell to 788 from 894 previously, and sales per outlet declined to 0.47 per week, from 0.54.

Net debt totalled £9.4m, compared with a cash position of £66.2m a year earlier, which Crest Nicholson said was better than expectations.

The company proposed an interim dividend of just 1.0p per share, down 82% from the 5.5p payout a year earlier.

By 0920 BST, the stock was down 8% at 221.9p.