Crest Nicholson Faces Profit Contraction as Expenses Surge

Crest Nicholson, the housebuilder, has revised down its profit forecast once again due to increasing costs related to a prolonged housing project delay in Surrey. The company cited ongoing challenges with the completion of the Brightwells Yard regeneration scheme in Farnham, initially contracted in 2003, which has faced delays and changes to construction plans. Crest Nicholson now anticipates an adjusted pre-tax profit of £41 million for the fiscal year ending in October, marking a decline from the initial forecast of nearly £74 million. In addition to the challenges in Farnham, the company is expecting legal costs of £13 million related to a fire incident at one of its housing sites in 2021. Despite these setbacks, Crest Nicholson offered a slightly more optimistic view on housing market sentiment following recent reductions in mortgage deals. This comes after the group had previously lowered profit expectations to £50 million in August, down from the initial forecast of nearly £74 million, citing a summer slowdown in the housing market affected by higher mortgage rates and reduced housing inventory. In November, the profit expectations were further downgraded to a minimum of £45 million. The company is now conducting a comprehensive review of costs associated with the delayed projects, signaling additional expenses for the company.