UK homebuilder Crest Nicholson sees FY profit dip amid margin pressure
Adds sector context in paragraph 2, CEO comment in paragraphs 3 and 4
Nov 20 (Reuters) -UK homebuilder Crest Nicholson CRST.L issued a second profit warning in five months on Wednesday, forecasting annual profit at the lower end of its previous range attributing the downgrade to a higher share of sales from low-margin affordable housing.
Crest Nicholson's profit warning comes at a time when British homebuilders' hopes of a near-term recovery are dampened by fears that the Bank of England rate cut cycle might turn slower due to rising inflation, fuelled by the UK's ambitious new budget plans.
CEO Martyn Clark, who assumed the top role at Crest Nicholson in June, said the fiscal year 2024 had presented challenges due to both internal and external factors, with private open market sales volumes continuing to be impacted by affordability concerns.
"We will focus more on private sales and prioritise value over volume to enhance returns and margins," Clark said about the group's prospects for fiscal year 2025, which began on Nov. 1.
Crest Nicholson, which saw a failed takeover attempt from Bellway BWY.L earlier this year, reported a 7% year-on-year decline in home construction in fiscal 2024, building 1,873 homes.
The company, which has struggled with operational problems and low operating margins, forecast adjusted pre-tax profit to be at the bottom end of its 22 million pounds to 29 million pounds ($27.9 million to $36.8 million) outlook range guided in June.
($1 = 0.7873 pounds)
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Eileen Soreng
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