Crest Nicholson set to deliver fewer homes and warns over build defect impact
The building giant said it expects to deliver 1,800 to 2,000 house completions in the year to the end of October, down from 2,020 in 2022-23.
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Your support makes all the difference.Crest Nicholson has warned it may build 11% fewer houses this financial year and revealed a hit of up to £15 million from defects on past developments.
The building giant said it expects to deliver 1,800 to 2,000 house completions in the year to the end of October, down from 2,020 in 2022-23.
It said this reflected the “opening order book and the low level of reservations in the first two months of the financial year”.
The group said its weekly sales rate per outlet had improved in the eight weeks to March 15, having been under pressure in the run-up to Christmas.
It said build activity across the sector had remained at a lower level, but that this was seeing labour costs ease back.
“Overall build cost inflation has largely stabilised and at a level lower than prior year,” it added.
Crest also flagged a hit of up to £15 million after discovering “certain build defects” largely on four sites that were completed before 2019, when the group closed its regeneration and London divisions.
“These sites will require remediation over the next three years at an estimated cost of up to £15 million,” it said.
It added: “As a result, the board has decided to appoint third-party consultants to provide greater assurance on the adequacy of current provisions around these and other sites completed prior to 2019.”
The company will update further at its interim results in June.
The update comes after Crest reported plunging annual underlying pre-tax profits, to £41.4 million in 2022-23 from £137.8 million the previous year, with results knocked by market conditions and legacy build problems.
The business told shareholders at the time that it had put aside £13 million to cover a legal claim for a 2021 fire in one of its low-rises.
Its boss Peter Truscott took the opportunity to announce alongside the results that he would retire as chief executive and a member of Crest’s board after a five-year stint.
He is being replaced by Martyn Clark, currently the chief commercial officer at larger rival Persimmon.