Crest Nicholson: Housebuilder upbeat despite ‘tough and disappointing year’
Housebuilder Crest Nicholson has said it is “well-positioned” to meet housing demand with a new strategy, despite lower-than-expected profit this year.
Revenue at the housebuilder fell six per cent for the full year to October 31, to £618m, while operating profit fell 38.4 per cent to £31.3m.
Profit before tax fell 53.3 per cent year on year to £22.4m, and earnings per share fell 60.6 per cent to 5.6p.
It swung to an operating loss of £128.7m for the full year, from a profit of £29.9m last year.
The company’s share price fell nearly five per cent in early trades.
Its chief executive Martyn Clark, who joined the firm in June 2024, said it had been a “very tough and disappointing year for the business”.
Clark said he had taken a “comprehensive review to understand the business, which has included obtaining both internal and external perspectives.”
“This has allowed me to identify the market opportunity and craft a strategy that will allow us to maximise that opportunity and optimise the company for sustainable growth with an appropriately scaled cost base that will enhance profitability and consistent shareholder value creation,” he said.
Crest Nicholson has been struggling with a tough environment in construction, with high interest rates, a skills shortage and operational problems all contributing to a “long and frosty winter”, Julie Palmer, partner at Begbies Traynor, said.
“[However] we may see some green shoots start to emerge as some of these factors stabilise,” Palmer added. “Crest needs to demonstrate it can take advantage of the expected uptick in construction.”
Interest rates have started to come down and are expected to drop further this year, although this has yet to filter through to lower mortgage rates as commercial banks remain cautious.
The Government is also set to relax tight planning permission rules, which is widely expected to lead to an uptick in construction, particularly if combined with investment in hard-to-find construction skills.
“As competition for contracts begins, has Crest’s new leadership created the right environment and structure to grow? Only time will tell,” Palmer said.
Crest Nicholson was set to be taken over by rival FTSE 250 housebuilder Bellway for £720m, but the deal fell through last August.