Crest Nicholson has recorded losses of £144million for the year in the face of increased building safety costs.
The pre-tax loss was for the year to 31 October, reflecting a significant drop from the 23.1million in 2023. The housebuilder incurred exceptional charges to the tune of £166million over the year, with £132 spent on replacing combustible materials and a further £25million on additional remedial work. Crest has spent a total of £249million on safety remediation work so far.
Despite the large expenditure on building safety costs, the group would still have recorded a dip in profit year-on-year. Excluding the remediation work, Crest’s pre-tax profit fell to £22.4million from £48million, while its turnover dropped by 6% to £618.2million from £657.5million.
Martyn Clark, the CEO of Crest Nicholson since June 2024, said that the developer’s results were in line with those forecast when he took the position.
Clark said: “Nevertheless, this has been a very tough and disappointing year for the business. Despite this, there must be acknowledgement of the hard work and dedication of our colleagues at Crest Nicholson, and I extend my heartfelt thanks to them for their continued commitment to the group.”
Clark continued to say that a comprehensive review of the company was underway with the findings due to be shared in March.
He said: “This has allowed me to identify the market opportunity and craft a strategy that will allow us to maximise that opportunity and optimise the company for sustainable growth with an appropriately scaled cost base that will enhance profitability and consistent shareholder value creation.”
Crest’s home completions fell compared to the previous year, down 7.3% from 2,020 to 1,873. Crest said that this was a result of a “weak order book at the start of the year as a consequence of low levels of confidence in the housing market”. The group’s average sales per outlet per week also fell to 0.48 from 0.52 the previous year.
Its average number of sales outlets decreased from 47 to 44, and the housebuilder said that it is anticipating a further small decrease in 2025 which it says is a result of planning delays due to environmental impacts such as water and nutrient neutrality.
The trading update said: “The housing market remained sluggish throughout 2024 compared with much of the previous decade, with comparatively high mortgage rates, low consumer confidence and an absence of meaningful government support all contributing to the suppressed levels of demand.”
“As the year progressed, a commencement of loosening monetary policy and a new government with more expansive housing aspirations provided some level of improvement in the overall sales environment.”
