Housebuilder slows site starts and reduces land buying, warning full year profit will be at lower end of previous guidance
Housebuilder Crest Nicholson racked up a £35m half-year loss it said today, adding that it remains in negotiations with lenders over revised banking covenants.
The firm said the losses for the six months to April were on turnover down 21% to £198m, while the number of completions dropped 21% to 584 homes.
Crest said it now expects its full year earnings to be at the lower end of its £5m to £15m guidance range while it said it was expecting housing sales of around 1,400, which would be a 17% reduction on last year.
It said: “Since April, pricing has generally remained resilient, but customer enquiries, visitor levels and land market sentiment have softened. Against this backdrop, the group has adopted a more cautious outlook for the remainder of the financial year.”
The group said it has reduced land buying, marketed non-core land for disposal, slowed the pace of new site starts and aligned “work in progress with revised sales expectations”.
It added: “These actions, together with disciplined cost control and rigorous working capital management, are designed to optimise liquidity, support balance sheet resilience and ensure that the group is well placed to benefit when market conditions improve.”
Meanwhile, the firm said itsongoing negotiations with lendersover revising its banking covenants were “well advanced”. It said that while it was confident that an amendment will be secured, it is “not guaranteed” saying there was a material uncertainty over the outcome of the refinancing discussions.
Crest Nicholsonwarned in Aprilthat it was seeking a relaxation of covenants due to expected lowered profits, citing Iran war impacts.
The group’s net debt has almost doubled to £142m, with interest costs increasing by 21% as result.
Source: Building.co.uk