Crest Nicholson Holdings (LSE:CRST) has revised down its full-year volume target to 1,400–1,500 units (from 1,550–1,700) and now expects EBIT of around £5m–£15m for the year ending in October, citing worsening macro uncertainty and weaker land-market conditions.
The group says open-market reservations remain in line with improved levels seen since mid-January and trading is positive in the Midlands, South-West and Eastern divisions, but the South is soft and new enquiries and visitor numbers have fallen. The current order book stands at 1,106 units.
Land sales have softened sharply: only one plot sale has completed so far and buyer appetite has weakened. Crest Nicholson now expects land-sale revenue of c. £40m (previously £75m–£100m) and does not anticipate a material profit on disposals in the remainder of the year.
Fire remediation work has not increased the existing provision; the group remains on track to start 80% of affected sites by the end of July and now expects cash remediation spend of £75m–£80m. It has also built in higher build costs and forecasts interest of c. £15m and year-end net debt of £100m–£120m.
"We remain committed to our strategy of positioning Crest Nicholson as a leading player in the mid-premium housing market and continue to make good progress on our Project Elevate transformation initiatives. ... We are doing what needs to be done to navigate this uncertainty to best position the business to deliver the attractive medium-term opportunity."
Martyn Clark, CEO, said the group has begun talks with lenders about temporary covenant relaxation and will update the market in due course.
