Crest Nicholson shares plummeted to a record low on Thursday after the UK housebuilder forecast an annual operating loss of approximately £10 million. This marks the third time the company has reduced its earnings guidance since April and signals a significant downturn from its previous expectation of a profit between £5 million and £10 million for the year ending October 2026.
The FTSE 250 firm reported a first-half loss of £26.2 million prior to the typically quieter summer trading period. Trading conditions over the summer were described as "more subdued than expected," with the net open market sales rate falling to 0.35% in the last six weeks, down from 0.48% earlier in the year and 0.55% a year prior. Consequently, Crest Nicholson now anticipates full-year completions to be between 1,350 and 1,400 homes, a reduction from the earlier projection of 1,400 to 1,500.
The company's shares fell 12.07% to 53.9p, contributing to a 62.54% loss for the year. Crest Nicholson joins a growing number of housebuilders issuing warnings about a weakening market, attributing the challenges to affordability pressures on consumers and increasing operational costs. The firm has also experienced reduced demand for bulk sales, where larger quantities of homes are sold at lower prices to institutional investors.
Martyn Clark, chief executive of Crest Nicholson, acknowledged the difficult trading environment but stated that "tangible progress" is being made on internal actions. The group now forecasts year-end net debt to be between £70 million and £90 million, a downward revision from the previous guidance of £100 million to £120 million, aided by a fire remediation recovery and land sale revenues.
Crest Nicholson is reportedly in discussions with its lenders to relax banking commitments in light of the market slowdown, though it anticipates some adjustments to the current timeline. Anthony Codling of RBC Capital Markets noted that while the sales volume reduction is small, it has a significant impact, turning a projected profit into a loss. Codling also observed that at 61p, Crest Nicholson shares are trading at a 63% discount to the sector, suggesting that the company's self-help measures are helping to mitigate the impact of challenging market conditions.