Housebuilder Crest Nicholson is looking to axe around 130 jobs after reporting a £51m loss in the first half of the year.
Crest Nicholson suffered losses of £51m in the six months to April, compared to a £64m profit in the same period last year.
Operating profit sunk 162.1 per cent from a profit of £70.8m in 2019 to a loss of £44m.
Revenue for the first half of the year dropped more than 50 per cent from £501.9m to £240m. The housebuilder said it would make axe approximately 130 jobs to help deliver overhead savings of £5m a year.
The slump in revenue is in part due to the number of completed homes falling 34.7 per cent to 775. Crest Nicholson reported forward sales of £575.1m.
Why it’s interesting
Crest Nicholson is one of the first housebuilders to report the devastating effect of the coronavirus pandemic on profits.
The firm said it had experienced its best sales week for the rolling 12-month period in the week before lockdown measures were imposed. It added that the virus paired with the political uncertainty of December’s election contributed to its losses in the six months to April.
The housebuilder said coronavirus had also forced it to defer the planned opening of an additional division.
However there are encouraging signs that the sector is starting to open up again, as reservation rates return to pre-lockdown levels.
What Crest Nicholson said
Chief executive Peter Truscott said:
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.
Taking decisive action now will ensure Crest Nicholson is able to flourish in whatever market conditions may emerge in the future including if the market quickly returns to growth.”