Crest Nicholson downgrades profit forecast for third time in six months

Crest Nicholson has issued yet another profit warning, downgrading its profit forecast for a third time in a matter of months to £41m.

In November, the firm lowered its annual profit forecast for the second time to £45m to £50m. This followed a previous lowering of its forecast in August from £73.7m to £50m. 

A trading update published today on the Stock Exchange explained that work on “legacy sites” had further hit its pre-tax profit figure for the year to 31 October 2023.

In November last year, the firm revealed its 239-home £115m Brightwells Yard regeneration in Farnham had incurred an extra £11m in “incremental costs”, which it said would hit profit for the second half of 2023.

In its statement, the firm said it has “conducted a comprehensive review of the costs associated with the work required on this project as well as other legacy sites,” which is why it has adjusted its profit forecast. 

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The £780m-turnover housebuilder also said it had to fork out an ‘“exceptional” £13m due to a legal claim relating to fire damage on one of its sites dating back to 2021. 

Crest said the £13m was “unrelated to the general fire remediation programme” it is currently delivering. 

Last year, Crest announced some details of its plan for cutting costs following a review of its cash commitments.

It said it intended to reduce administrative expenses by £3m, slow the pace of growth in its Yorkshire division to around 300-350 units by 2026 and merge its new East Anglia division into its eastern division. 

In August, Crest warned its net cash would fall to below £100m, down from £277m the previous year.

The firm is due to publish its preliminary results on 23 January.