By Aby Jose Koilparambil
(Reuters) -Homebuilder Crest Nicholson warned on Thursday its annual profit would fall at least by a third and reported an 88% slump in half-year earnings, as the British housing sector faced slowing demand, sending its shares sharply lower in early trade.
Shares in the company, which have lagged the FTSE All-Share index over the past year, were trading about 12% lower at 212.40 pence to be the top percentage loser on the midcap index.
Sticky inflation has clouded the UK’s monetary policy easing outlook, tempering expectations of a swift recovery in the housing market.
The company, which also cut its dividend payout, said trading momentum had “softened slightly” since Easter due to a delay in Bank of England’s rate cuts, while the imminent general election was creating “short-term uncertainty”.
Crest Nicholson forecast annual adjusted pre-tax profit in the range of 22 million pounds to 29 million pounds ($28.1 million to $37.1 million), hurt by working through lower-margin sites and hit by a one-off cost. Analysts on average had expected a profit of 38.9 million pounds for the current financial year, according to LSEG data.
“Clearly, full year PBT is being guided lower on a softer market and the extra costs, but the valuation discount looks too wide assuming the risk of further provisions is now materially lower,” analysts at Investec said.
The company, which has struggled with its operational problems and low operating margins, said exceptional charges increased to 30.3 million pounds from the previously disclosed 15 million pounds.
Crest cut its interim dividend pay to 1 pence per share from 5.5 pence last year, and scaled down the top end of its annual home-build forecast range by 1,000 units.
It reported adjusted pre-tax profit of 2.6 million pounds for the six months ended April 30, compared with 20.9 million pounds a year ago.
($1 = 0.7821 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Varun H K, Nivedita Bhattacharjee and Rashmi Aich)
