Crest Nicholson Shares Plunged 6.0% on FY 2023 Trading Update

The Crest Nicholson Holdings PLC (LON: CRST) share price plunged 5.98% after releasing a trading update for the 2023 financial year, which ended 31 October 2023. The housing construction company noted that In the aftermath of their November post-close trading statement, Crest Nicholson encountered additional costs at Brightwells Yard in Farnham. 

The project, part of their legacy site portfolio, incurred an incremental cost movement of around £11 million in the second half of FY23. The development was primarily due to the ongoing efforts in completing various legacy sites.

Following this, the Group thoroughly evaluated the expenses related to the completion of this project and other legacy sites. This exhaustive review led to the identification of further additional costs. As a result, these newfound expenses will significantly affect the financials of FY23. 

Consequently, Crest Nicholson anticipates an Adjusted Profit Before Tax of £41 million for FY23, a figure readjusted in light of these recent developments. Moreover, Crest Nicholson expects to recognise an exceptional charge of £13 million in FY23. 

This charge, which is non-cash for the current fiscal year, arises from a legal claim linked to a low-rise apartment scheme the Group developed, which unfortunately suffered damage due to a fire in 2021. The company is handling this claim with diligence and efficiency and plans to disclose more details in the upcoming preliminary results. 

On a more positive note, the recent decrease in mortgage rates has created a more favourable environment for house buyers and the broader housing market. While it is still premature to determine customer behaviour trends conclusively, Crest Nicholson has observed a promising rise in customer interest and inquiries since the start of this calendar year.

The uptick in engagement is a hopeful sign for the housing sector and could signal a rebound in market activity.

As the industry navigates through changing economic landscapes, Crest Nicholson’s latest update reflects its ongoing commitment to transparency and accountability. The company's ability to identify and address unforeseen challenges, such as the additional costs at Brightwells Yard and the legal claim, demonstrates its proactive approach to managing complex situations.

Crest Nicholson (CRST) share price. 

The Crest Nicholson share price fell 5.98% to trade at 202.80p from Friday’s closing price of 215.70p.