House builder Crest Nicholson has warned that housing sales have plunged more sharply than expected with full-year profits now forecast to be around £50m rather than £74m as forecast at the half-year.
The profit warning amid poorer-than-expected trading conditions came as the firm also warned it had raised provisions for its complex loss-making mixed-use scheme Brightwells Yard in Farnham.
At the half year, Crest set provisions at £11.6m to cover losses, which have now been revised up by a further £4m.
In a pre-October end-of-year trading update this morning, Crest’s management said it would focus on cutting overheads in the next financial year.
This programme would see the newly-created East Anglia division merge into its existing Eastern division.
Ambitions for Crest’s new Yorkshire division would be reined in with the pace of growth and onboarding of further resources expected in this region to be revised to reflect the market conditions.
Further detail on these initiatives will be shared in the Group’s November trading update.
Chief Executive Peter Truscott said: “The board remains positive and confident about the outlook for Crest Nicholson. While the current trading conditions are challenging, over the medium term it expects inflation to abate and mortgage rates start to reduce.
“In addition, the group has a strong financial position and an experienced leadership team who are used to trading through downturns in the cycle.”