Crest Nicholson has reduced its profit forecast for the second time in quick succession, with the housebuilder also looking to cut overheads by making redundancies.
The company’s latest trading update released this morning (16/11) said that it has adjusted its pre-tax profit to £45million to £50million for the year to 31 October, having already scaled it down from £73.7million to £50million in August.
Crest Nicholson issues profit warning as home sales plummet
The housebuilder’s Brightwells Yard regeneration, a 239-home, £115million scheme in Farnham, Surrey, had run into an additional £11million of build costs, which the trading update states has had an adverse effect on profit.
The statement went on to outline the housebuilder’s cost-cutting measures, which will include merging its newly-formed East Anglia division into the Eastern division, slowing the growth of the Yorkshire division and reducing administrative expenses by £3million. As a result, job losses are expected, although an exact figure was not included in the trading update.
Crest Nicholson’s trading update also showed the developer’s falling cash position. After warning that its net cash position would fall to under £100million, Crest saw its year-end net cash actually drop to £64.9million, a significant decrease from £277million in the previous year.
