Crest Nicholson issued a profit warning on September 3, projecting a loss of approximately £10 million for the fiscal year ending in October, a sharp reversal from its previous guidance of a £5 million to £10 million profit. The company also reduced its full-year home delivery target to between 1,350 and 1,400 units, down from an earlier forecast of 1,400 to 1,500 units. Following the announcement, the company's shares tumbled 12% in early trading.

The firm attributed the downgrade to weaker-than-expected market demand, with the traditionally slow summer trading period proving especially challenging. Affordability constraints and competitive pricing continued to weigh on the pace of open-market sales, while lower prices on bulk transactions with institutional investors further squeezed profit margins.

In response to the pressures, Crest Nicholson is currently in discussions with its lenders regarding amendments to its covenant terms, cautioning that the timeline for these negotiations could face delays. On a more positive note, the company has reduced its debt through fire-safety remediation cost recoveries and land disposals. It now expects year-end net debt to land between £70 million and £90 million, an improvement from the previously projected £100 million to £120 million range.

Like other UK housebuilders, Crest Nicholson continues to feel the impact of the war in Iran. The geopolitical conflict has driven up energy and construction costs while keeping interest rates elevated for a longer period, further dampening demand in the housing market.