By Laura McGuire
Housebuilder Crest Nicholson has lowered its profit guidance for the year due to issues at its Brightwells Yard regeneration scheme in Farnham, and warned of an unexpected legal bill for a fire at one of its sites in 2021.
The developertold markets this morning, it now expects adjusted profit before tax to reach £41m, down from November’s £45m update.
It is the third profit warning posted by the group in this financial year.
The developer also told markets it was now expecting a £13m charge related to a 2021 fire at one of its low-rise apartment sites. The charge is not cash in financial year in 2023.
Crest blamed “incremental cost movement” of approximately £11m in the second half of FY23 as the group worked on completing this and other ‘legacy’ sites.
The Farnham development includes a shopping centre, a six-screen cinema and a host of apartments.
The FTSE 100 builder won a contract to build a mixed use development site in the area back in 2003 but after struggling to find financial backing it is only now close to completion two decades later.
Crest Nicholson said: “The group has subsequently conducted a comprehensive review of the costs associated with the work required on this project as well as our other legacy sites.”
“Consequently, further additional costs have been identified which will impact FY23 and the Group now expects the adjusted profit before tax to be £41m for FY23.”
Despite this, board members cheered a recentreduction in mortgage rates for improving the outlook for the house building market.
They said: “The recent reduction in mortgage rates has provided a more constructive backdrop for house buyers and the wider housing market. “
“Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year.”
