Source: Sharecast
The housebuilder said in an update that affordability constraints and competitive pricing continuing to weigh on open market sales rates. Over the last six weeks, it achieved a net open market sales rate of 0.35, down from 0.48 in the first half and 0.55 in the same period last year.
Crest Nicholson said pricing pressure has remained particularly evident in bulk sales, where it continues to take "a disciplined and selective approach" to transactions.
The housebuilder now expects full-year completions of between 1,350 and 1,400, down from previous guidance 1,400 to 1,500, and an EBIT loss of around £10m, versus previous guidance for a profit of £5m to £10m. "The reduction in profitability reflects lower expected completions following weaker open-market demand, and continued competitive pricing, particularly in bulk transactions, also resulting in some further NRV provisions on a small number of sites," it said.
The company said it remains in constructive talks with lenders to amend its covenants and ensure it has an appropriate level of funding and liquidity going forwards, although it now expects "some slippage" in the current timetable and will provide a further update in due course.
On the plus side, Crest said year-end net debt is now set to be better than expected, at between £70m and £90m, versus previous guidance of £100m to £120m.
Chief executive Martyn Clark said: "While the trading backdrop has remained difficult through the summer, we are making tangible progress on the actions within our control. Our cash optimisation programme is delivering with the expected year-end net debt position now materially better.
"The group continues to make good progress against its strategic priorities. We are building a stronger operational platform through tighter cost control, improved procurement, disciplined land and WIP management, and a continued focus on build quality and customer service.
"Looking ahead, our new house types remain on track to contribute from end of FY27. These homes will support Crest Nicholson's repositioning towards the mid-premium segment, with a more consistent product range, improved customer proposition and the potential for greater build efficiency and stronger margins over time.
"Although the timing of a broader market recovery remains uncertain, the group is taking the right actions to protect liquidity and improve operational execution, while positioning the business for recovery when market conditions normalise."
At 0855 BST, the shares were down 11.5% at 54.26p.
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