Crest Nicholson cutting jobs as it warns over annual profits

Around 130 jobs are being axed at housebuilder Crest Nicholson in an overhaul to slash costs, as it warned full-year profits are expected to fall by more than 70%.

The group said the job losses – around 13% of its 1,005-strong workforce – follow a decision to scrap plans for a new division, called Crest Nicholson Southern Counties, merge two other units and cut costs across the head office and other businesses in the face of the coronavirus crisis.

It came as half-year results showed the group swinging to a first-half statutory loss of £51.2 million against profits of £64.4 million a year earlier, with Crest warning full-year underlying profits are set to fall by up to 71%.

The builder is expecting underlying full-year profits of between £35 million to £45 million, against £121.1 million in 2019.

Shares tumbled more than 8%.

The cost cutting comes less than six months after Crest had already announced a shake-up to save £30 million and get financials back on track.

Chief executive Peter Truscott, who joined Crest last September after leaving rival Galliford Try, unveiled new plans in January after admitting he was “disappointed” with results for 2019, when profits fell 28%.

He is now aiming to cut annual costs by around a further £5 million under the latest overhaul.

Crest said: “It is never easy for management to take decisions such as these being proposed, especially so soon after launching an updated strategy and during a period of significant economic and job uncertainty.

“However, it is important that we quickly recognise the likely scale and magnitude of the Covid-19 pandemic on our business and act decisively to protect the longer-term interests of our employees, customers and shareholders.

“We will be a leaner organisation than we envisaged in January, but we will be more appropriately sized for the market conditions now anticipated.”

Crest said it had been encouraged by improved trading since England’s housing market reopened last month, with a “modest” number of reservations and completions for the six weeks to May 18.

But it cautioned over a “highly uncertain operating environment”.

Analysts at Liberum said the first-half results were “much worse than expected”.