Crest Nicholson: ‘Persistently’ high inflation leads house builder to lower forecast for the year
British house building company Crest Nicholson said it expects adjusted profit before tax for the full year to be around £50m down from previous expectations of £73.7m, after a challenging period for the sector bruised business activity.
The Surrey based firm said “persistently” high inflation and rising interest rates worsened during the summer of this year and rising mortgage rates dampened consumer confidence.
While inflation is showing signs of cooling, the firm said core inflation and wage inflation both remain high – which has continued to impact trading conditions.
In its half year results published earlier this summer, the company’s pre-tax profits sank 60 per cent and its revenues were down 22.4 per cent.
“Rapidly falling consumer confidence and rising interest rates immediately translated into softer demand in the housing market,” Peter Truscott, chief executive at Crest Nicholson, said at the time.
The business joins fellow house building companies whose earnings have also been hurt by the weakening market.
It’s total group revenue was also hit by the volatile market, shrinking to £1.19bn compared to £1.69bn and its underlying operating profit contracted to £152.2m down from £440.7m.