Jan 29 (Reuters) - British homebuilder Crest Nicholson on Thursday warned of subdued demand conditions continuing into the start of its fiscal year 2026, after reporting annual profit below market
Crest Nicholson Reports Early Signs of Recovery in UK Housing Market
Crest Nicholson's Market Outlook
Jan 29 (Reuters) - Britain's Crest Nicholson flagged early signs of a housing-market recovery on Thursday, sending its shares up as much as 8%, even though last year's profit missed expectations.
Operational Improvements and Profit Forecast
Housing demand had been soft in the run-up to the government's November budget, with fears of tax hikes weighing on buyers — a trend also highlighted by rival builders Vistry and Taylor Wimpey.
Market Demand and Sales Trends
However, the fiscal tightening was not as harsh as some had feared, and Crest said activity had improved since late December, with more website visits and sales inquiries, and January sales rates strengthening as interest rates ease.
Concerns Over Interest-Cover Covenant
The stock was on track for its best day since March 2025, up 8% at 146.6 pence by 1039 GMT.
OPERATIONAL IMPROVEMENTS
Crest forecast adjusted pretax profit of 32 million to 40 million pounds ($44 million to $55 million) for the 12 months to October 2026. That compares with the 26.5 million pounds it reported for fiscal 2025, which missed analysts' consensus estimate of 32.8 million pounds.
While Crest warned that subdued demand would persist near-term, its projection for 1,100–1,200 open-market completions for fiscal 2026 points to a stabilisation from the 1,095 in fiscal 2025.
The homebuilder has been cutting costs through job reductions, office closures and "right‑sizing" its land bank, while shifting towards the more resilient mid-premium segment, where affluent buyers have shown steadier demand.
"While there is still much debate about the speed of the macro improvement, there are clear signs the business is in a much better shape post the operational improvement," Peel Hunt analysts said.
Crest has also warned it may breach its interest-cover covenant as early as April 2026 in a severe downturn, posing some uncertainty about its prospects, though it said it remains confident in its lender relationships.
($1 = 0.7236 pounds)
(Reporting by Raechel Thankam Job in Bengaluru. Editing by Mrigank Dhaniwala and Janane Venkatraman)
