24th Jun 2020 08:49
(Alliance News) - Crest Nicholson Holdings PLC on Wednesday said it swung to a pretax loss as Covid-19 dented its first-half performance, and it guided to a sharp drop in annual profit.
The Chertsey, England-based residential developer reported revenue for the six months to April 30 down 52% to GBP240.0 million, resulting in a swing to a pretax loss of GBP51.2 from a GBP64.4 million profit a year prior.
The FTSE 250 constituent said it saw strong sales momentum in the wake of the UK general election and the run-up to the spring selling season, but Covid-19 hurt its first-half performance.
"Revenue and profit were both lower than we had anticipated with a substantial number of private completions planned for the end of April being postponed. We also saw indecision in several bulk deal negotiations as we entered the period of peak uncertainty," the company said in its statement Wednesday.
It has, though, been "encouraged" by the trading environment in recent weeks, even if the backdrop remains "highly uncertain".
Crest said it now expects adjusted pretax profit to be around GBP35 million to GBP45 million for the current financial year, after achieving just GBP4.5 million in adjusted profit for the first half.
A year ago, first half adjusted pretax profit amounted to GBP64.4 million. For the financial year to the end of October 2019, the firm reported adjusted pretax profit of GBP121.1 million.
Housing forward sales as at June 19 stood at GBP575.1 million, down 9.7% from GBP636.9 million a year prior, Crest said.
"However, we cannot ignore the risks that Covid-19 presents to the UK housing market even if we cannot predict with certainty what the impact of those risks will be," said Chief Executive Peter Truscott.
"Therefore, we have adapted our strategy by deferring the planned opening of an additional division and targeting further reductions in overheads. Taking decisive action now will ensure Crest Nicholson is able to flourish in whatever market conditions may emerge in the future including if the market quickly returns to growth," added Truscott.
The company has not declared a dividend for the first half after cancelling the final dividend for the full year to the end of October 2019. Crest said it will reinstate dividends "when appropriate".
The stock was trading 7.9% lower in London on Wednesday at 231.00 pence a share.
By Evelina Grecenko; [email protected]
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