British homebuilder Crest Nicholson trims full-year outlook

August 21, 2023 08:47 AM PDT | By Invezz

British homebuilder Crest Nicholson trims full-year outlook — Image source: Invezz

Crest Nicholson blames mortgage rates

On Monday, the construction company blamed higher mortgage rates and economic uncertainty as it trimmed its guidance for the full-year adjusted profit before tax.

Crest now expects to end the current year with £50 million in pre-tax profit on an adjusted basis – down significantly from its previous guidance of £73.3 million. The London-listed firm said in a press release today:

While pricing has remained resilient in a market with limited supply and few distressed sellers, the economic uncertainty is deterring prospective home movers.

Peers including Bellway and Barratt Developments echoed the same in recent weeks. Crest shares are now down about 35% versus its high in April.

Crest Nicholson has had a weak start to H2

Crest Nicholson saw its weekly sales per outlet stand at 0.25 homes in the seven weeks through August 18^th. It had previously guided for 0.50 units for the back half of 2023.

Note that the construction company reported a 60% annualised decline in its first-half profit in June. According to Russ Mould – Investment Director at AJ Bell:

The scale of Crest Nicholson’s warning may come as a shock to investors given it reported its H1 results just a couple of months ago and this hints at the speed and scale of deterioration in the market.

CRST currently pays a dividend yield of 9.65%. Also on Monday, Rightmove said asking prices on average for homes in the United Kingdom were down significantly this month.

The post British homebuilder Crest Nicholson trims full-year outlook appeared first on Invezz.

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