Crest Nicholson Holdings has announced a revision in its adjusted pretax profit guidance and plans to streamline its operations in fiscal 2024. The company will implement cost-cutting measures, including job cuts, in response to the challenging business environment.
Revised guidance indicates that Crest now anticipates its adjusted pretax profit for the year ending October 31 to be in the range of £45.0 million to £50.0 million ($55.9 million-$62.1 million). This is a decrease from the previous guidance of approximately £50.0 million issued in August.
Following a comprehensive review, Crest has identified several measures to reduce overheads in fiscal 2024. These changes are expected to result in a reduction of around £3.0 million in annualized administrative expenses. The company also plans to align its workforce and resources in existing divisions with the predicted output levels for fiscal 2024. This realignment is likely to lead to a decrease in headcount, although specific details regarding job cuts have not been disclosed.
Rebuilding for the Future
Despite the difficult decisions being made, Crest's Chief Executive, Peter Truscott, expressed optimism about the company's future prospects. He believes that these strategic adjustments will position the group for a robust recovery once more favorable market conditions emerge.
Crest Nicholson Holdings remains committed to navigating the current challenges and has taken decisive steps to ensure long-term success.
Crest's Fiscal 2024 Outlook
Crest, a prominent house builder, has not disclosed the expected fiscal 2024 output. However, as of November 10, they reported forward sales of 1,710 units with a gross development value of GBP408.5 million. This is a decrease from the previous year, which saw 2,038 units and a gross development value of GBP526.2 million.
Private sales per outlet per week for the 10-week period leading up to October 31 were at 0.39, excluding bulk sales. Crest attributes this to ongoing weaknesses in the housing market, but notes that there is an upward trend. When including bulk sales, the rate stands at 0.80.
Looking ahead, Crest anticipates a challenging market in 2024, with elevated interest rates persisting until inflation returns to targeted levels. However, the company also acknowledges that build cost inflation is gradually easing from the mid-single digit percentages. This reduction is expected to continue throughout the new year.
Crest's job cuts are not unique in the house-building industry during this difficult business environment. Vistry Group, a peer of Crest, recently announced adjusted pretax profit guidance revisions along with plans to reduce their workforce by approximately 200 employees. This strategic shift aligns with their increased focus on their Partnerships unit.
As of 12:42 GMT, Crest shares have declined by 3.6 pence or 1.9%, reaching 185.5 pence.