Crest announce job cuts and £51.2m loss due to Covid-19

Property Reporter
25th June 2020
construction 998

Housebuilder, Crest Nicholson, has revealed that it plans to cut around 130 jobs and has reported a pre-tax loss of £51.2m due to the effects of political uncertainty and the coronavirus pandemic.

The firm announced its results for the half-year ending April 30, 2020, and said that it would also delay the opening of a new division. The proposed redundancies will bring a saving in overheads of around £5 million “on an annualised basis”.

In half-year 2019, the firm made a pre-tax profit of £64.4 million.

During the six month period, Crest’s revenue fell 52% to £240 million with the number of home completions dropping 34.7% to 775, against HY 2019. The average selling price of the homes slid 16.7% to £344,000.

Meanwhile, the company’s average outlets rose to 64 from last year’s 58. Forward sales stand at £575.1 million against HY 2019’s £636.9 million.

Crest experienced “significant volatility and uncertainty” during the first two months of its financial year in the approach to the general election. But the decisive election result saw its sales gain “strong momentum” before the UK lockdown was imposed, it said.

The combination of political uncertainty and coronavirus-affected sales notably impacted first-half profitability, it added.

Since reopening its operations in May, Crest has seen increased levels of web traffic and footfall, with reservation rates returning to pre-lockdown levels.

Peter Truscott, Crest’s CEO, said: “Despite a difficult first-half performance we have made excellent progress implementing our updated strategy. We are ahead of our own expectations in a number of our strategic priorities and that has been delivered against the backdrop of Covid-19.

“However, we cannot ignore the risks that Covid-19 presents to the UK housing market even if we cannot predict with certainty what the impact of those risks will be. Therefore, we have adapted our strategy by deferring the planned opening of an additional division and targeting further reductions in overheads.”

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