Investing.com — slashed its full-year earnings forecast to between £5 million and £15 million, against a company-compiled consensus of £43.7 million, and said it had begun talks with lenders over a potential covenant relaxation, sending shares down over 37% on Tuesday.
With interest costs of approximately £15 million, the British housebuilder said pretax profit for fiscal 2026 is now expected to range from a loss of £10 million to breakeven, against a prior consensus of £33.5 million.
The company attributed the revision to worsening macroeconomic conditions since its AGM trading update on March 25, including Middle East tensions, the prospect of a higher-for-longer interest rate environment and a deterioration in consumer confidence.
Chief executive Martyn Clark said in the statement, “It is increasingly clear that the current macroeconomic uncertainty is contributing to the prospect of a more prolonged higher interest rate environment, renewed cost pressures and a deterioration in consumer confidence.”
“Therefore, in the near term the right and prudent course of action is to adapt quickly to the challenges presented by the current trading environment and focus on prioritising cash generation and optimising our balance sheet position,” Clark added.
Crest Nicholson lowered its fiscal 2026 completion guidance to between 1,400 and 1,500 units, from a previous range of 1,550 to 1,700 units.
The company said year-to-date sales remain in line with expectations but that it has taken a more conservative view of the second half following recent reductions in new enquiries and visitor levels.
On land sales, the company now expects proceeds of approximately £40 million in the current financial year, against a previous range of £75 million to £100 million.
Management said it still sees potential for £75 million to £100 million in total land sales but expects the pace to be slower, citing reduced buyer engagement and increased price sensitivity. No profit on land disposals is anticipated in the remainder of the year.
The company said it now expects cost inflation of 1% to 2% on top of a previously anticipated increase of 1% to 2%.
It said it is prioritising cash and balance sheet strength, including a reduction in finished plots inventory, particularly completed apartment stock, and tighter cost controls across its developments.
On fire remediation, the company said ongoing work had not identified a requirement for any additional provision and that it remains on track to meet the Government target for starting works by July.
Cash expenditure on fire remediation in the current financial year is expected to be slightly below £75 million to £80 million, with the Group also actively pursuing a number of remediation recoveries.
The Group said the period of economic uncertainty is likely to continue for at least the first half of its financial year, which concludes at the end of October.