British housebuilder Crest Nicholson has warned of an unexpected loss for the current year, attributing the downturn to difficult trading conditions within a "subdued" property market. The company, in an unscheduled trading update, stated it now anticipates an operating loss of around £10m, reversing an earlier forecast of a profit between £5m and £10m.
The firm has revised its projection for home completions in the year to 31 October, expecting to complete between 1,350 and 1,400 homes, down from its previous estimate of 1,400 to 1,500. Crest Nicholson noted that property market conditions have been "more subdued" than anticipated over the summer, with sales rates slowing in the past six weeks due to "affordability constraints and competitive pricing" impacting demand.
Building material prices remain approximately 3% to 4% higher on average. In response, Crest has closed one divisional office and cut 50 jobs in recent months. The company is also in discussions with lenders to renegotiate banking covenants, describing the talks as constructive but anticipating "some slippage in the current timetable."
Martyn Clark, chief executive, commented that while the trading backdrop has been difficult, the group is taking actions to protect liquidity and improve operational execution, positioning the business for recovery when market conditions normalise.