Leading residential developer Crest Nicholson has seen its share price fall by five per cent in early morning trading after the firm announced a dip in pre-tax profits.
For the six months to the end of April, the building company suffered a two per cent drop in pre-tax profits to £74.8m from £76.2m in the same period one year ago, showing that rising costs had impacted on the firm’s margins.
Despite the decline in profits, the firm had a 13 per cent rise in revenues, to £473m, and operating profits grew one per cent to £81.4m.
The Surrey-based housebuilding firm struggled from shrinking margins as well, with a fall from 19.1 per cent to 17.2 per cent, caused primarily by build cost inflation and flat pricing.
Crest Nicholson said it would be taking action to address the cost pressures it faces, such as improving overall efficiency and investing in areas of greater housing affordability.
Chief executive Patrick Bergin said: “Our experience of generally flat pricing against a back-drop of continuing build cost inflation has had an adverse impact on our margins and we have taken a number of actions to seek to offset build cost pressures and invest in areas of greater housing affordability.”
Bergin added: “Our robust business model, focused on delivering well-designed product across the Southern half of the UK, ensures the business is well positioned to thrive against a backdrop of continuing strong demand for housing.”