Shares in housebuilder Crest Nicholson plunge because it points revenue warning amid market turmoil

Crest Nicholson has joined the growing list of housebuilders that have issued profit warnings as the Middle East conflict increases building costs and risks keeping interest rates higher for longer.

Crest also revealed it is in early talks with its lenders to relax its banking commitments amid a slowdown in the housing market triggered by the Iran war.

The housebuilder said it had revised its outlook for the year in anticipation of higher build costs and would prioritise cash preservation ‘while the uncertainty persists’.

It said that because of lower expected profitability, it is negotiating a temporary relaxation of its financial requirements with its lenders.

Shares in Crest Nicholson plunged by over 40 per cent to 63.09p in early trading.

Crest Nicholson shares have collapsed this morning after it issued a profit warning 

Crest Nicholson expects Ebit for the current financial year to be between £5million and £15million, interest costs of £15million and a net debt position of £100million to £120million.  

It said that it had seen a softening in land sale demand, with buyers becoming more cautious amid the ‘uncertain’ outlook. 

It now expects sales of £40million for the year ending October 2026, compared with an earlier forecast of between £75million and £100million.

In home sales, it said that while it is not experiencing ‘materially higher levels of discounting,’ there had been a reduction in new enquiries and visitor levels.

It now expects sales volumes of between 1,400 and 1,500 units for the year, down from the previously forecast 1,550 to 1,700 units.

Chief executive Martyn Clark said: ‘It is increasingly clear that the current macroeconomic uncertainty is contributing to the prospect of a more prolonged higher interest rate environment, renewed cost pressures and a deterioration in consumer confidence.

‘Therefore, in the near term the right and prudent course of action is to adapt quickly to the challenges presented by the current trading environment and focus on prioritising cash generation and optimising our balance sheet position. 

‘We are doing what needs to be done to navigate this uncertainty to best position the business to deliver the attractive medium-term opportunity.’