Crest Nicholson’s profit plunged 39 per cent to miss revised forecasts in a terrible year for the housebuilder, it said today.
Profit before tax sank from £168.7m in 2018 to £102.7m for the year ending in October. That missed guidance of between £120m and £130m, the result of last October’s profit warning.
Profit margins were also squeezed to 12.2 per cent, a four per cent year-on-year drop.
And home sales slipped two per cent from £1.122bn in 2018 to £1.095bn.
Meanwhile net cash more than doubled to £37.2m and Crest Nicholson managed to maintain its 33p total dividend per share.
Why it’s interesting
Crest Nicholson said it was particularly exposed to last year’s Brexit uncertainty, which it blamed for its poor profit.
The housebuilder mainly operates in London and the south east, where house prices have fallen since the 2016 EU referendum.
Parliament’s prolonged Brexit debates only hurt customer appetite for homes, Crest said.
“During the second half of the year, there was increased volatility in the number of site visits, reservations and completions, and elevated cancellation rates as customers continued to cite concerns over political and economic uncertainty stemming from Brexit,” it said.
“In our geographies and at our price points, the resulting uncertainty has led consumers to refrain from buying until the economic and political landscape is clearer.”
What Crest Nicholson said
CEO Peter Truscott said:
Today I am pleased to announce the details of our updated strategy and new financial targets. We have already taken decisive action in reducing our sales-related costs and overheads, launched an enhanced house type range including a full specification review, and have made organisational changes to realise our ambitions in our partnerships division.
We have assembled an experienced new leadership team with the necessary skills and capabilities to take Crest Nicholson forward. In 2020 we will continue to work quickly in implementing further changes to improve performance and to create value for shareholders. I look forward to updating you on progress in future communications. Crest Nicholson is a resilient business with a bright future. I am confident that our updated strategy will restore Crest Nicholson to being one of the UK’s leading house builders.