The housebuilder said that during the second half of FY 2019, it had experienced a more volatile sales environment in some of its regional businesses - with the greatest impact felt in its legacy London sites – governed by shaky consumer confidence related to Brexit uncertainty.
Crest is therefore anticipating pre-tax profit for the full year to be around £120 million - £130 million, compared to the £176.4 million of FY 2018.
“In addition to this,” Crest’s statement read, “the leadership team has also considered the latest government guidance notes in respect of combustible materials, fire risk and protection and regulatory compliance on completed developments. As a result, it is considered it appropriate to record an exceptional charge in the year of approximately £17 million."
Against a backdrop of continuing political and economic uncertainty, Crest added that it expected consumer confidence and open market sales rates to remain affected.
Looking ahead, it anticipates FY 2020 pre-tax profit (excluding exceptional charges) to range from £110 million – £120 million, while predicting strong profit growth the following year and afterwards “as the updated strategy starts to take full effect.”
In response to the continuing challenging conditions, Crest, under its new leadership team, has reviewed the business’ current strategy. It has made changes to accelerate “action in particular areas”, including a reduction to ongoing overhead and sales-related costs of operations, a more selective approach to land sales, and a plan to increase its number of sales outlets and develop schemes of different tenures.
The business would issue more detail “on plans to maximise shareholder value” when announcing its full year results in January, Crest said.
Peter Truscott, Crest’s new CEO, said: “The company’s high quality land portfolio with a strong south east presence offers significant opportunity to generate value for shareholders and we have identified a number of opportunities that will enable us to strengthen shareholder returns over the medium term.
We are taking decisive action to ensure the business moves further and faster to make the most of the opportunities in front of it. While current market conditions remain uncertain, the prospects for Crest Nicholson over the medium term remain highly attractive.”
