Housebuilder Crest Nicholson warns of annual loss in ‘subdued’ property market
Summary
Crest Nicholson, a British housebuilder, expects to lose money this year due to slow sales in a weak property market. The company has reduced its home completions forecast and reported a half-year loss, while working to lower its debts and renegotiate bank deals.Key Facts
- Crest Nicholson expects to build between 1,350 and 1,400 homes this year, less than the previous estimate of 1,400 to 1,500.
- The property market has been slow, with sales dropping in the summer due to affordability issues and competitive prices.
- The company now expects an operating loss of about £10 million, instead of a profit.
- This is the third time Crest has warned investors about lower profits since April.
- Building material costs are still 3% to 4% higher than normal.
- Crest has closed one office and cut 50 jobs recently to reduce costs.
- The company reported a £35.2 million pre-tax loss for the first half of the year.
- Crest is reducing its debt faster than planned and expects net debt of £70 to £90 million by October.
- It is in talks with banks to change its loan agreements to secure funding, but these talks are taking longer than expected.
- The wider property market is affected by global issues, including the US-Israel war’s impact on oil prices and inflation fears.
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