Crest Nicholson to ‘prioritise worth over quantity’ as income weaken

Crest Nicholson’s boss has said the firm will prioritise private sales in the coming year as it warned annual earnings will be towards the bottom end of its forecast range.

Martyn Clark, who became chief executive in mid-June, told investors the company wanted to ‘prioritise value over volume’ during the 2025 financial year to help bolster returns and margins.

The Surrey-based housebuilder expects adjusted pre-tax profits to be ‘at the lower end’ of its £22million to £29million guidance range for the year to the end of October. 

It blamed this on the increasing share of affordable properties delivered and the ‘trading out of low-margin sites’. 

Crest said it constructed 1,873 homes, around 45 per cent of which were affordable or private rental units, compared to 2,020 in the previous 12 months.

The FTSE 250 group reduced its new build outlook in March owing to a smaller order book and a subdued number of reservations last November and December. 

Britain’s housebuilding sector has experienced a challenging time over the past two years as higher interest rates and cost-of-living pressures have dampened demand.

However, mortgage rates have since come down to more affordable levels, spurring a rebound in residential transactions and prices.

There were 6,645 mortgage products available last month, according to financial information provider Moneyfacts, nearly three times as many as in October 2022.

‘Encouragingly, the broader economic landscape is becoming more favourable, with a more benign interest rate environment and increased government support to improve the planning process,’ said Clark.

The new Labour Government has promised to build 1.5 million properties over five years, partly by employing more planning officers and making it easier to develop on lower-quality’ grey belt’ land.

Only 183,610 new homes were completed across the UK in the 12 months to March, recent Office for National Statistics revealed.

Crest Nicholson shares were 0.6 per cent down at 152.4p on Wednesday morning, although they have slumped by around 29 per cent so far this year. 

The firm’s share price tumbled in August after it rejected two takeover bids by fellow housebuilder Bellway, with the larger proposal totalling £720million.

Crest turned down the offers, claiming it was ‘confident in its standalone prospects’, partly due to its ‘highly attractive land portfolio’ and Martyn Clark’s leadership.

Clark joined the company a day after Crest slashed dividend payments and declared its fifth profit warning in under a year alongside pre-tax losses of £30.9million.